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A Real Estate Investment Trust ("REIT") be Organized to Qualify as a REIT:

A U.S. REIT must be formed in one of the 50 states or the District of Columbia as an entity taxable for Federal purposes as a corporation. It must be governed by directors or trustees and its shares must be transferable. Beginning with its second taxable year, a REIT must meet two ownership tests: it must have at least 100 shareholders (the 100 Shareholder Test) and five or fewer individuals cannot own more than 50% of the value of the REIT's stock during the last half of its taxable year (the 5/50 Test).

To ensure compliance with these tests, most REITs include percentage ownership limitations in their organizational documents. Due to the need to have 100 shareholders and the complexity of both of these tests, it is strongly recommended that tax and securities law counsel are consulted before forming a REIT.

 

How REITs Operate:

A REIT must satisfy two annual income tests and a number of quarterly asset tests to ensure the majority of the REIT's income and assets are derived from real estate sources.

At least 75% of the REIT's annual gross income must be from real estate-related income such as rents from real property and interest on obligations secured by mortgages on real property. An additional 20% of the REIT's gross income must be from the above-listed sources or other forms of income such as dividends and interest from non-real estate sources (like bank deposit interest). No more than 5% of a REIT's income can be from non-qualifying sources, such as service fees or a non-real estate business.

Quarterly, at least 75% of a REIT's assets must consist of real estate assets such as real property or loans secured by real property. A REIT cannot own, directly or indirectly, more than 10% of the voting securities of any corporation other than another REIT, a taxable REIT subsidiary (TRS) or a qualified REIT subsidiary (QRS). Nor can a REIT own stock in a corporation (other than a REIT, TRS or QRS) in which the value of the stock comprises more than 5% of a REIT's assets. Finally, the value of the stock of all of a REIT's TRSs cannot comprise more than 20% of the value of the REIT's assets.

 

Dividend Distribution Requirements for a REIT:

 

In order to qualify as a REIT, the REIT must distribute at least 90% of its taxable income. To the extent that the REIT retains income, it must pay taxes on such income just like any other corporation.

 

 

REIT Compliance Rules:

In order to qualify as a REIT, a company must make a REIT election by filing an income tax return on Form 1120-REIT. Since this form is not due until March, the REIT does not make its election until after the end of its first year (or part-year) as a REIT. Nevertheless, if it desires to qualify as a REIT for that year, it must meet the various REIT tests during that year (except for the 100 Shareholder Test and the 5/50 Test, both of which must be met beginning with the REIT's second taxable year).

Additionally, the REIT must mail annual letters to its shareholders requesting details of beneficial ownership of shares. Significant penalties will apply if a REIT fails to mail these letters on time.

Capitalization of a New REIT:

 

STEVE MUEHLER - SECURITIES Focuses on ensuring your REIT meets the 100-shareholder test of the Internal Revenue Code. STEVE MUEHLER - SECURITIES is quickly becoming the Global Leader for successful offerings, complete with documentation and filing services. Whether through a Private Offering or a Public Offering, STEVE MUEHLER - SECURITIE has an industry-validated processes in place to do it right every time.

STEVE MUEHLER - SECURITIES takes the lead in drafting all the ancillary documents necessary to conduct the offering, including:

  • Offering Memorandums

  • Preparing all SEC (or equivalent) Filings

  • All Required Federal or State Filings

  • Broker - Dealer agreements

  • Subscription agreements

  • Investor questionnaires

  • Engagement Letter

 

Once the REIT Investment Offering is ready, STEVE MUEHLER - SECURITIES helps our clients tell their investment stories effectively, and get them heard by the right audiences. This involves strategic investor and corporate communications, highly targeted outreach to the buy- and sell-side, expert counsel, market intel and analysis, day-to-day IR, and an array of other services, typically over the course of long client relationships.

 

STEVE MUEHLER - SECURITIES combines a fluency in finance and investing with a deep understanding of each client’s business, industry and culture, as well as management’s goals and philosophies. For some clients, we serve as an outsourced investor relations department. For larger companies with an IRO or similar internal capabilities, we provide an array of support services. In either case, we work very closely with our clients, functioning like part of the internal team.

Investor Communications:

  • Investment Thesis & Messaging

  • Investor Presentation Development

  • Earnings Communications

  • IR Website Audit & Development

  • Investor Information Exchange

  • Investor Communications Advisory

Investor & Analyst Outreach:

  • Investor/Analyst Targeting & Direct Outreach

  • Deal & Non-Deal Roadshows

  • Investment Conference Access, Prep & Coordination

  • Presentation and Q&A Coaching

  • Investor Day Organization

  • Relationship-Building in Investment Community

  • Investor/Analyst Relations Advisory

Corporate Communications:

  • Corporate Positioning & Communications

  • Website Development Management

  • Management Transition Communications

  • Restructuring/Turnaround Communications

  • M&A Communications

  • Corporate Communications Advisory

Market Intel, Analysis & Reporting:

  • Customized Peer Monitoring & Analysis

  • Shareholder/Peer-holder Analysis

  • Pre-meeting Intelligence

  • Post-meeting Feedback

  • Institutional Holder Reporting

  • Board Meeting Preparation & Reporting

IPO/Transaction Communications & Advisory:

  • Investment Banking Introductions

  • Investment Positioning

  • Roadshow Presentation Development

  • Roadshow Q&A Preparation

  • IR Website

  • Comprehensive Post-Transaction Planning & Disclosure Training

  • Broad-spectrum Advisory on Transaction & Support in Transition to Public Status

Crises & Shareholder Activism:

  • Crisis Communications & Advisory

  • Shareholder Activism Counsel & Communications

Private Company Services:

  • Investor Messaging & Communications

  • Conference Targeting & Arrangement

  • Investment Banking Introductions

  • Peer/Market Intel & Analysis

Media Relations:

  • Strategic Earned Media

  • Expert Positioning

  • Media Training

  • Social Media

Special Projects:

  • Perception Studies

  • Investor Days/Tours

To Retain and Engage STEVE MUEHLER - SECURITIES for a REIT Formation & Offering

(Public and/or Private):

STEVE MUEHLER - SECURITIES regularly works with companies and their legal counsel with respect to the creating both Private and Public REITs; we consider it one of our specialties.

The process preparing either a Private REIT with an Offering (Reg D / CA 1001 /  Reg A+ / Reg S) or a Registration Statement & Offering for a Public REIT can take a few weeks to prepare (depending on amount of material and complexity of the REIT). The entire STEVE MUEHLER - SECURITIES team is available throughout this entire process.

 

Service(s) to be Provided:

  • Registration of the company / REIT with the United States Securities & Exchange Commission.

    • Obtain SEC CIK Number

    • Obtain EDGAR Online Access

  • Registration of the Company / REIT with ISIN International, and obtaining an International Stock Identification Number (ISIN).

  • Drafting & Preparation of a Federal Securities Laws Compliant REIT Public or Private Offering.

    • Our Custom Private or Public REIT Offering / Registration Statement includes (but is not limited to):

      • Offering Structuring and Development of a Presentation Grade REIT Offering / Registration Statement,

      • all SEC Filing(s) as required via the EDGAR,

      • all ISIN Filings as required

      • Capital Markets filing support (NYSE, NASDAQ, OTC),

      • Federal Securities Laws Compliance Review, and

      • Access to our Broker-Dealer Network & International Institutional Investment Banking Network.

      • Does Not include any expenses associated with any required Company Formation, Financial Audits, Legal Opinion Letters, Stock Transfer Agents, DTC Registration, Broker Dealer / Market Maker Fees, Shares Registration Fees paid to the SEC, and/or any Listing Fees associated with a Capital Markets Listing. 

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STEVE MUEHLER - SECURITIES
1055 West 7th Street
Los Angeles, California 90017
Phone: (310) 463-5122
Email: Steve@SteveMuehler.com